Canada's telecom regulator will likely rule this week that the country's biggest phone companies won't be free to set their own prices for VoIP phone service, Reuters is reporting.
Or as the London Free Press puts it, “ Canada 's dominant telephone companies find out Thursday whether the federal telecom watchdog will keep them in regulatory straitjackets while their cable-TV rivals eagerly deploy and market new local phone services based on Internet technology.”
The Canadian Radio-television and Telecommunications Commission confirmed yesterday that it will issue its long-awaited decision on May 12 on how it will regulate VoIP phone service.
The major Canadian telcos still dominate the market, and want regulators to clear off and let open competition settle the matter. However, the regulator issued a preliminary view in April 2004 that prices for VoIP services provided by the big players should be regulated like conventional local phone service.
Analysts say Bell, Telus Corp. and the other established phone giants stand to lose 20 per cent of their local phone revenues as the cable companies move aggressively onto their century-old turf.
The phone companies, London Free Press writes, argue that technological advancement has turned them into sitting ducks. They say regulating how they market VoIP would force them to fight an onslaught of new competitors with one hand tied behind their backs.
"The incumbents have been saying regulating VoIP is like regulating the Internet, but my view is that the CRTC is not looking at it that way. I think they're looking at it from a market power standpoint," Jeffrey Fan, a telecoms analyst with UBS Securities in Toronto tells Reuters. "I think they will uphold that (preliminary) view. The implication from a competitive landscape standpoint is that it will favor the cable companies and the (newer) competitors."
If the CRTC rules as expected, Mick Brady writes, “companies will be required to obtain CRTC approval for VoIP prices, which would even out the playing field for such companies as Primus Telecommunications Canada Inc. and Vonage Holdings Corp., as well as a number of cable companies, including Rogers Communications Inc., Shaw Communications Inc. and Vidotron Lte.”
The main point of dispute in the discussion over regulation is whether VoIP ought to be considered a telephone or an Internet service. In the United States, VoIP remains unregulated.
Eamon Hoey, senior partner with management consulting firm Hoey Associates, told Reuters he thinks the commission should not regulate prices for VoIP services, but probably will. "This commission is not the most progressive," he said, adding it will "continue ensuring that it has a long life as a regulator."
David Sims is contributing editor and CRM Alert columnist for TMCnet.
To discover how contact centers can save money and increase productivity by making the switch to IP Telephony, be sure to attend TMC's IP Contact Center Summit May 24-26, 2005, in Dallas, Texas. IP Contact Center Summit is co-located with the Speech-World conference, where you can get expert guidance in the deployment of speech technologies to strengthen customer relationships.
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